Ramp up
Encyclopedia
Ramp up is a term used in economics
and business
to describe an increase in firm production ahead of anticipated increases in product demand. Alternatively, ramp up describes the period between product development, and maximum capacity utilization
, characterized by product and process experimentation and improvements.
Ramp up typically occurs when a company strikes a deal with a distributor
, retailer, or producer, which will substantially increase product demand. For example, in June, 2008, after launching a joint venture with Guangzhou Automobile, Toyota announced that it would “ramp up” production in China
to meet expected increases in market demand by constructing a plant in Guangdong
, which would produce some 120,000 additional Camry sedans.
As ramp up is typical in early stages of firm or market development, the term and process is widely associated with venture capital
, which seek to rapidly increase rate of return on investment
, just prior to exit
. For example, Wrightspeed, the producer of the X1 electric car prototype, began to seek out capital in order to hire on 50 well-trained employees in order to “ramp up” production in anticipation of sales successes.
Economics
Economics is the social science that analyzes the production, distribution, and consumption of goods and services. The term economics comes from the Ancient Greek from + , hence "rules of the house"...
and business
Business
A business is an organization engaged in the trade of goods, services, or both to consumers. Businesses are predominant in capitalist economies, where most of them are privately owned and administered to earn profit to increase the wealth of their owners. Businesses may also be not-for-profit...
to describe an increase in firm production ahead of anticipated increases in product demand. Alternatively, ramp up describes the period between product development, and maximum capacity utilization
Capacity utilization
Capacity utilization is a concept in economics and managerial accounting which refers to the extent to which an enterprise or a nation actually uses its installed productive capacity...
, characterized by product and process experimentation and improvements.
Ramp up typically occurs when a company strikes a deal with a distributor
Distributor
A distributor is a device in the ignition system of an internal combustion engine that routes high voltage from the ignition coil to the spark plugs in the correct firing order. The first reliable battery operated ignition was developed by Dayton Engineering Laboratories Co. and introduced in the...
, retailer, or producer, which will substantially increase product demand. For example, in June, 2008, after launching a joint venture with Guangzhou Automobile, Toyota announced that it would “ramp up” production in China
China
Chinese civilization may refer to:* China for more general discussion of the country.* Chinese culture* Greater China, the transnational community of ethnic Chinese.* History of China* Sinosphere, the area historically affected by Chinese culture...
to meet expected increases in market demand by constructing a plant in Guangdong
Guangdong
Guangdong is a province on the South China Sea coast of the People's Republic of China. The province was previously often written with the alternative English name Kwangtung Province...
, which would produce some 120,000 additional Camry sedans.
As ramp up is typical in early stages of firm or market development, the term and process is widely associated with venture capital
Venture capital
Venture capital is financial capital provided to early-stage, high-potential, high risk, growth startup companies. The venture capital fund makes money by owning equity in the companies it invests in, which usually have a novel technology or business model in high technology industries, such as...
, which seek to rapidly increase rate of return on investment
Investment
Investment has different meanings in finance and economics. Finance investment is putting money into something with the expectation of gain, that upon thorough analysis, has a high degree of security for the principal amount, as well as security of return, within an expected period of time...
, just prior to exit
Exit
Exit may refer to:* Door* Portal , an opening in the walls of a structure* Emergency exit* Overwing exit, a type of emergency exit on an airplane* Exit ramp, a feature of a road interchange-Computing:...
. For example, Wrightspeed, the producer of the X1 electric car prototype, began to seek out capital in order to hire on 50 well-trained employees in order to “ramp up” production in anticipation of sales successes.